1) I objectively identify my edges
2) I predefine the risk of every trade
3) I completely accept the risk and/or I am willing to let go of the trade
4)I continually monitor my susceptibility for making errors
I understand the absolute necessity of these principles of consistent success and therefore, I NEVER VIOLATE THEM!
I have this taped up onto the side of my monitor. I pulled it out of a book but I can't remember which one. Just some good words to follow and to live by as a trader.
Noticed something interesting between these 3. They're creating something that I've heard been called, the jaws of death. Which something I've kind of noticed before but didn't know how it would play out but now it's still going on about 3-4 weeks later.
If you notice in the black box, the red line (bonds) are heading down which creates the bottom part of the jaw. The blue line (sp500) creates the upper line of the jaw and creates a mouth looking thing. It represents recession. Gold is still up, sp500 up yet bonds are going down, dollar is going down. Bad situation in my opinion, for what it's worth.
I was in the shower this morning and I came up with an analogy on how I view trading.
I call it the bus analogy.
Say you want to go from LA to NY riding the bus. You go to the bus stop and wait for the bus to come by. The thing about this bus is, it won't stop for you. It'll keep driving by so you need to jump on when you have an opportunity to get on.
Now, the bus isn't being driven by one person. Everyone on the bus is deciding which way we should go to get to NY from LA. When the bus decides that it wants to go back home to LA, why would anyone want to go back when their so set on going to NY? Get off the bus and wait for the next ride to come. Get on when you can again, and see how far it can take you before you'll have to get off and wait for the next bus.
At the same time once the bus starts turning around to get back, you don't want to be forced to travel more ground so you get off at the closest bus stop and wait for a new one to come. Doing this over and over, you'll eventually get to NY. It'll take some time but if you keep looking forward and waiting for the next bus to come by as you know it will since there are busses all over and at the same get off once it starts going the wrong way, you'll get to your destination.
There was more I wanted to say but I forgot some of it as I was trying to write out what I remembered. If it comes to me I'll edit this.
After I made that complete trading plan I waited until after hours so I can start finding stock setups for Monday and I quickly started noticing something. Once I got down to the 3 stocks I liked out of 80 or so, I realized that I setup high expectations for the stocks. I didn't notice it until tonight. That would probably explain why I've been on so such a crazy losing streak. When it comes time to look for entry points, I'm so focused on my target and exit prices that I can't objectively see the market as it's happening and I'm missing the true opportunities as they're unfolding.
I should be able to keep a plan, but adapt to the new situations, which I can't do. Paralysis by analysis. Before I'd wake up not knowing what I was going to be trading that day. I'd have a real time scanner going picking up opportunities and since I didn't have any expectations that morning I could easily and objectively spot opportunity after opportunity and take them as they happened without fear. Once I got in I immediately put in a stop and let the stock unfold.
The thing I didn't do however was get in using an edge or something that would help with identifying good entry and exit points. I kind of winged it so to speak. That's when I started looking to setup a plan to find stocks the day before, which now I've tried, I can't do. I just can't focus on the market when I do that. I wake up with all these expectations of how my stock should unfold but when it goes against me I don't mind, I know it's part of the business. My problem though is I can't identify the true opportunities like I can when I wake up with no expectations.
So, I'm kind of in a weird mental state right now. I'm going to spend all next week with no expectations of winning. I'll scan the market, if an opportunity comes up in real time, I'll pull up the chart and see if I can spot an entry using a 9 and 21 day EMA setup. I'll get in if I can, set my stop and let it unfold. If the stock starts providing profits then I'll look to start raising my stop to break even then eventually raising it capture profits.
Only down side is. I don't have the necessary requirements to day trade. So I'll only be making 3 full trades at the most a week. Which is nothing, but it'll be a start to test my mental state in this new modified environment.
I'm glad I've finally come to this realization that what I've been doing was, to put it lightly, the worst thing I could be doing, trading without a full plan. I knew all along I needed one, but I couldn't develop one that was custom tailored to me. I've developed a plan that I like and it's a very simple system. I won't know how this will perform so I'll have to stick with it religiously for a few months to see how it's working out but I think it'll do ok.
Stock Selection:
Step 1: 9 day EMA must be either heading up to cross the 21 day or have just crossed the 21 day EMA on a 6 month chart in 1 day increments
Step 2: Plot out support and resistance levels on the 6 month chart
Step 3: Stock must be close to support levels and far enough from resistance to potentially make a decent profit
Step 4: If the stock can't make a 3.0 risk/reward, lower percentage of portfolio to use (see Stop Loss) if neither option can work, abandon stock
Step 5: Volume must be increasing over the 200 day EMA as the 9 day EMA is starting to cross the 21 day EMA.
Step 6: If everything checks out start looking for an entry and exit point
Entry:
Step 1: Zoom in to a 5 day intra day chart to plot potential support/resistance
Step 2: 9 Day EMA must be close to crossing or has crossed the 21 day EMA.
Step 3: Stock must be close to support and far away enough from resistance to potentially make a 3:1 profit
Step 4: Depending on where the stop is, figure out how many shares to buy
Stop Loss:
Step 1: Place stop based on volatility of the stock and support levels on a 3 day chart
Step 2: 2% stop (maximum) use 50% of portfolio
Step 3: 4% stop (maximum) use 25% of portfolio
Exit:
Step 1: Zoom in to a 5 day chart and see where the action is in relation to support/resistance
Step 2: When the stock gets close to either 6 month or 3 day resistance, raise stop to a level of profit taking but not enough to get stopped out right away
Step 3: Either get stopped out and move on or let the stock run until I do get stopped out (keep raising stop)
This will be my base plan. I'm sure I'll be fine tuning this over time but this is what I'll be working with.
I saw an opportunity early in the morning to get in so I took it. I got in at 57.05 with a stop at 56
Lets see how this plays out.
Edit:
Sold MDT at 56.70 Wasn't working out and I know why. I don't have a freaking entry and exit strategy for my new system I'm using for stock selection. Right after I bought MDT I immediately realized, "what the hell am I doing, I don't even know when to get in or out". So, I'm scraping everything and starting over and keeping it nice and simple. It's taken me about 3 weeks of losses to figure all this out even though I knew I needed it, I don't know how to implement it to fit my style and personality.
My next post will be my trading plan for stock selection, entry and exit. The plan will be going in my trade book and will be followed religiously until I can see some results on how it's been working out.
Here's the chart for MDT on my exit.
I needed to take today off. I feel like I've been going way overboard with my trades these last couple weeks and my results prove it. Today was good though, I felt like I regained my objectivity again and I can see and think clearly. I'm also feeling a lot more confident with myself.
I came across MDT and I like where it's at right now. It had a nice little shot upward and looks to be in a very tight trading range, about a 1% range for the last few days. Looks like it's "taking a break" before it shoots again. I don't have any intra day data for this guy so I can't really fine tune my entry and stops but whatever my entry is my stop will be 1 point below that if I buy under 57. I'll have an alert go off at 57.08 which could be the starting point of it taking off if it gets to those levels. The low alert will go off 56.70 so I can start looking for a good entry point.
edit: Well, looks like MDT just hit my low for the day post market and is now at 56.56 on just under 150k shares. I'll setup a new low at 56.30 and if it drops below 55.50 I won't touch it anymore
MDT:
TSU is basically the same setup. Had a nice move up, and looks to be going neutral or in a resting period. It's also riding some decent resistance at 41 levels so if it can break those I think it'll give it that much more boost to the upside. I don't have intra day data for this either so I'll be setting up alerts to go off to let me know when potential entry points might be present.
I'll have a high alert go off at 40.95 and a low go off at 40. I'll set a stop roughly 1 point below entry just like the MDT setup, depending on if I can get in and at what price.
Oh yeah, I'll be using imageshack.us now to host my pics as I'm sure there's some people who has to adjust their browser because my pics are so big (to me their small) and it'll help me consolidate all my chart pics and keep them online instead of having 100's of JPEG charts on my PC.
Mark Douglas once said, "Ninety-five percent of the trading errors you are likely to make-causing the money to just evaporate before your eyes-will stem from your attitudes about being wrong, losing money, missing out, leaving money on the table"
I've over come all of these except the fear of missing out. Which is clearly shown on my blog on all the trades I make every day that consistently become losers. I've been forcing myself to justify bad setups into thinking they can be profitable just so I can trade them. I need to seriously stop that if I want to be successful at this for the rest of my life. I'm reading this book for the second time now since I'll be having more down time while I wait for good trading setups.
The quote above is from a book called Trading In The Zone by Mark Douglas. Easily one of the best books you can find on trader psychology. Anyone who is interested at all in the market or who is currently trading now as an amateur or professional should read this book before doing anything else with trading.
My last post about CKP I won't be trading. It's only trading around 130,000 shares I think. Way below my guide lines. I still watch it to see if it plays out but I won't be trading it either way.
I'm going to do my best to stay patient and wait for my opportunities, not the ones that other people are waiting for all around me who've found them based on their systems.
Basically, I don't want to be over trading anymore. It's starting to kill me.
Found a decent looking setup using my new system. One that I'm going to stick with forever. Includes stocks that have made quadruple tops are riding support and trading at least 250,000 shares. Stock needs to have the potential to make 5-7% while risking a max of 3%
I don't know if I'll trade this right away. It needs to hit the $27 dollar level before I even consider. If it does hit 27, I'll start looking for a lower entry point if possible. I'll setup a stop around 26.35. If it gets close to 27.85 I'll consider selling if it can't break these levels. If it does start piercing these levels I'll definitely hold onto tight as we'll probably be going higher.
One thing I'm going to change is I won't force a trade. Something that I think I've been trying to do the last week or so. I need to wait for the really good looking setups, instead of the mediocre ones. That's something I going to try and work on. The setup below would be close to mediocre, in my opinion.
I think what I'm doing is over trading. I'm finding opportunities that look good but don't perform. Or still, my time frame for holding a stock is way too short. I need to get over, over trading. Maybe I should try holding my stocks for a few days longer and see if my analysis of the stock will play out if it has time to grow, instead of forcing gains.
I also need to develop more strict guidelines for picking stocks. These are my current guide lines; stocks that have made new triple tops, stocks that are very close to support levels, stocks at least 250,000 shares. I need to fine tune this more to where I get to the point that I have a higher probability of the trade performing better than worse. Although I'm not worried about having a trade go sour, I'm worried about my probability of winning trades, which has gone down significantly over the last month or so. On the other hand, I have changed my trading plan since then.
Before, I was trading stocks purely based on trending channels of support/resistance. Buy low, sell high in this upward channel. In June and July this was fairly easy since we were in a great trending market. Things have changed and I haven't been able to spot any trades that looked like the ones I traded back in the early summer. That's probably when I started over trading. I felt I had to be in the market constantly to be make money. Which isn't the case as I have, ummm...7 losing trades now in a row.
This is all part of the learning process I guess. I'll need to keep fine tuning my system and myself as a trader if I want to be truly great.
Looks like I was stopped out. I'm gonna have to re evaluate the way I've been picking stocks.
I've been trying to find ways to use my personality as an edge for my trading. I back in HS I took a Meyer Briggs personality test to find out what my personality was so we could find out what jobs would match us based on who we were. I was an INTJ, which is A "visionary, architect of systems, builder"; who "works on ideas with ingenuity and logic"; who "learns by an impersonal and analytical process for personal mastery"; and who is acknowledged in organizations for contributing "strategies and analyses".
NT's -The Promethean Temperament. Comprises about 12% of the population and includes all of the NT personality types: INTP, ENTP, INTJ, and ENTJ. NT's must be competent at whatever they do. They look to skills, abilities and ingenuity to define self worth. NT's love intelligence and want to do well under a variety of circumstances. They are the most self-critical of all styles and tend to put high standards on themselves and others.
Judging by that, you can see why I love technical analyses so much and why I always plot out my plan before I trade, It's in my nature to do so.
I found an excerpt on my personal and how it relates to trading.
The Promethean Temperament: The Promethean Temperament comes into being when the qualities of intuition (N) and thinking (T) are dominant. The NT temperament (INTP, ENTP, INTJ, ENTJ) is only found on average in about 2% of the population. As a result, NT people must grow up in an environment full of people who are usually quite different from them. For example, about one family in 16 would have both parents as Ns and only one in a thousand would have both parents as NTs.
The NT personality is looking for power over nature: to be able to predict, control and explain realities. Thus, the NT trader would be one who wants to predict, control and explain the markets, much of which is the antithesis of good trading. However, since his ultimate goal is to be a good/great trader, the issue is simply how to get there. He has a strong drive to continually improve (as opposed to the SPs drive to simply act). As a result, I would generally expect this group to produce more good traders than any other. Our data suggests this to be the case! First, we have a lot of data on the NT personality types. Although they only constitute about 2% of the population, NTs constitute 45.2% of our sample population—a truly amazing statistic. Among our NT traders, about 10% show outstanding trading records—a higher percentage than any of the other temperaments.
The NT is very self-critical. He badgers himself about his own errors. He taxes himself with the resolve to improve. If his pushing is used as a learning process, then he is bound to improve. However, the NT can easily get caught up in the perfectionist trap, which can prevent him from getting anywhere. For example, if the NT's self-criticism is tied into his/her self esteem, then he can become frozen into inaction or into repeating the same task because he is not satisfied with the results. However, I have found that NTs show tremendous improvement when they go through my private consultation program.
The NT is likely to know that recreation is important to his health and overall well-being. However, his play has little spontaneity or fun. Instead, NT play is an exercise in conquest and being the best. He does not allow himself to make any mistakes, logical errors, and yet, paradoxically, requires that he have fun because that's what people are supposed to do when they're playing.
The trader who is an NT will live his work. If markets stay open 24 hours, he is likely to try to follow the market for 24-hours just because the market exists and missing something might be making a mistake. He wants to be the best possible trader, so he will do whatever he can to be successful. He is extremely vulnerable to the "all work, no play" syndrome and this kind of attitude can lead to a very out-of -balance lifestyle.
The NT wants to be the scientific trader. They are drawn to occupations that have a logical understanding, in which they can master some new concept about trading or design some great new trading system. He has an inquiring attitude and deals with others in a straightforward, albeit cold, approach.
The NT generally focuses on the future, trying to figure out what might happen next. And once he masters a challenge, he is very likely to move on to another one. Why? Because his goal is competency in every field. Thus, his goal might be to achieve greatness in trading, but as soon as he receives it or thinks he has it, he is likely to move on to something else.
To develop NT skills, spend at least one day a week reading everything you can about the markets. Make a list of 50 ways you can improve your trading and then work diligently to adopt each of those ways.
You can find out your personality types by going here and reading Van Tharps ideas on why it relates to trading. This was the same test I had to take in my English class in H.S. for our senior project. It's about 70 questions but it's very thorough and in depth. I think it took me about 45 minutes to an hour to finish. I took the test 3 months apart and they both came out as an INTJ, which is what I am.
I'll be spending a lot of the day today finding my weakness in my personality and how I can take advantage of that to benefit my trading.
I think this might be considered an educated impulse buy, loll. I saw HSOA last night looking over a lot of charts and liked it but didn't setup a plan for it because I needed it to drop a little. Well, it it took off a little in the morning and I got in at 3.79. My stop is at 3.65 (black line) My target is about a 5-7% gain and I'll be holding it until the end of the day.
There is some resistance at 3.84 but after that it's up to the traders.
Interesting. Whoever is buying so many shares must know something about this. Especially now that it looks to be making a bottom.
Both of these charts are 6 month charts. I really wanted to emphasize how strong these support and resistance levels were so I panned it out to 6 months.
ZHNE: Below is a beautiful setup. My jaw actually dropped when I saw this. There is so much support at 1.22 it's unbelievable. I can put a stop at 1.18 which is way below normal here on the chart and still be in my risk guidelines. Heck, I can probably even drop it to 1.17. The upside potential for this is solid. There looks like a bit of short term resistance at the 1.25 level but the highs today pierced it and got to 1.27. Once we get passed 1.25 it could be all uphill from here until 1.38-1.40 area.
Entry: 1.22
Stop: 1.17
Exit: 1.40
Risk: 3%
Potential Gain: 13%
Shares: 400
Risk/Reward Ratio: 4.0
Potential Holding Time: 2-4 weeks
Only downside I see to this is the amount of volume. It's barely trading around 120,000 shares. I don't like to trade stocks unless it's at least 250,000. We'll see what happens.
COSI: This is one is looking good. However, I need to see it test the support levels at 3.60 which are pretty strong but I don't like the look of that candle for today. The current entry target could be a little too low but I think it's a good spot considering the bearish candlestick that's represented for today and the strong support level which the candle closed at. It's kind of stuck in between.
Entry: 3.50
Stop: 3.36
Target: 4.00
Risk: 4%
Potential Gain: 16%
Shares: 140
Risk/Reward Ratio: 4.0
Potential Holding Time: 1-2 weeks
Just got out of STKL, turns out it wasn't as good as it looked. No big, I didn't lose any money so that's good. I'll start looking for the next opportunity probably later tonight.
I sold at 13.95 I had a chance to get out at 14.00 but my internet connection dropped and I missed it right as I was filling in the order, I get a "connection cannot be completed" lol.
Looks like my price target was, well, way too high lol. I didn't think it would have this hard of a time breaking 14 bucks but hey, the markets are always right. My target price is 14 I'll hold it for the end of the day, if it doesn't hit 14 by the end of the day I'll put in a limit order for whatever the price is before the close.
I've also tightened my stop to 13.85 to dramatically lower my loss because of the light action. No need to be risking more than necessary.
STKL dipped very quickly to my entry point and my limit order got filled at 13.88. I immediately put in a Stop Loss at my target of 13.63. My time frame for this stock is a couple days so I'll do my best not to watch this stock like a hawk. My stop is set, my risk is already pre defined to a level I can tolerate, so I have nothing to worry about.
Today has been such a weird day, emotionally and psychologically for me. I got to the point where I was second guessing myself as a trader and questioned if I should even keep doing this. I'm sure my loss had something to do with it, 6 losses in a row, but hey, that's the nature of the business. Before, I didn't mind too much last couple weeks with my losses but I guess it was something about this 6th one that kind of did it for me. Any who, I'm over it and I'm feeling confident in my skills. After that trade I went to go eat, take a nap and then look over all my trades and notes which helped a lot boost my confidence again.
With that said, I've got a trade I really like for tomorrow. This time, if it hits my entry point, I'm going to trade it!! No matter what!, lol.
The way this is setup, I'll be risking about a 2% loss for a potential 6.5% gain. The entry point is riding above some strong support (green line). Stop loss is just under that by 30 cents which is in a great area (black line). The target exit point is where the red line is at 14.75 roughly where the last line of resistance is for this stock. The yellow line represents a little resistance over the last 6 days of trading so that'll be something to look out for.
Time frame for this stock will be 3 days at the max or less if my exit target is reached.
I've been going over my trade logs to see if I can pin point why my success rate has been declining so much. It's gone from a 68% success rate to 52%. I've been going through a 6 trade losing streak over the last couple weeks, with minimal loses but that's not the point.
I found out why I haven't been trading so well. My average holding period for a stock during my peak success rate was 2 days. My average holding time for a stock during my losing streak was about 10 minutes. I obviously can't day trade. I don't have the resources to make it happen and I need to realize it and stop wasting my time and money forcing something that won't work.
I'm going back to my old plan of swing trading. This is a classic example of how greed takes control and the losses take over. I've been thinking about this a lot this morning after that bad trade I had and I was swing trading very well back in June, July, and August and then this mortgage crisis came into play and that's when I changed my plan. I started changing my trading time frame from swing trading to day trading to try and capitalize on the new market conditions. I shouldn't of done that. I should of stuck to my plan/trading style instead of modifying it for the current conditions. If I couldn't find any opportunities, then I shouldn't of traded. Simple as that.
This is a pretty big breaking point for me as far as my personal development as a trader goes. I'm glad I've gone through this experience. I needed this to help me realize my goals and to not deviate from the master plan! I'm going to do what I can to learn from this last months experience and make sure it doesn't happen again.
I can't believe what I just did. For one, I had a plan for a stock, had it all laid out and I end up buying it at my exit price and selling it for a loss. Green box represents my entry and red box is exit. I feel like an idiot, not because I lost money but because I did the exact opposite of my plan.
I hesitated to pull the trigger at my original target entry point and I think it's because I'm putting a lot of pressure on myself to perform. I can only make 2 trades a week to comply with SEC regulations and when I trade I always catch myself trying to trade the best setup so I can make my trading worth while and profitable. I should be focusing on making good trades wether they be profitable or at losses. This is an extremely good example of a horribly bad trade.
So, now that I've used my trade, I have one left for this week, 2 more if I push my luck. Before I was doing about 6 trades a week with nice success because I didn't care if I was tagged a day trader or not. But now, I seriously need to control myself and in doing that I'm killing my performance and my gains. I'm way too limited by my capital.
In case anyone notices, I did lower my entry and stop loss targets to account for the drop in support, which, in hindsight was a good idea but I didn't take the opportunity.
The red thick line on the left resistance resistance early last week while the thick green line early this morning 6:08am PST shows like it might be establishing those old levels as new support. We'll need some more time to see how strong this new level really is, but it might be a good day.
Chart is showing a double top. I'll be setting an alert to go off if it breaks 50.40 so I can get a closer look to see the action, maybe it'll breakout, or maybe it'll bounce off it as resistance and fall. In any event, Monday will be a key day I think.
I had a post earlier about what Gold and T-Bonds are doing and how it's not a good situation. Well, I came across some more charts and I'd like to post them. The small chart is the 6 Month chart for the price of Gold and the bigger one is a 12 month chart of 30 year T-Bonds. You can see their going in the opposite direction. Fear and inflation are taking control over the T-Bonds, which represent the opposite. I'm going to keep bringing this up until something confirms otherwise.
What we should be seeing is either Gold and T-Bonds declining together, or Bonds outgrowing Gold. not what we have now. I noticed a lot of inflation just started up this past week and all this talk about how Gold is increasing so dramatically lately. Maybe it's the beginning of something a lot bigger than we can see now? Everyone is saying, oh, were strong, the economy is good, yada yada. They're rallying the market higher so They can get out.
S&P 500 is below in a 6 month chart. Ideally I'd like to see T-Bonds outperform the S&P but it looks like they're starting to run in tandem.
I went over my watch list of about 150 stock charts. I set them up in 5 day intra day charts and looked at each one and picked the setups I liked just by a glance. If I had to spend more than 7-10 seconds thinking if it looked good I just closed it and moved on. The ones I liked I saw immediately and they seem to be stocks that have had an upward trend, pulled back, consolidated, and ready to test new highs. The tickers listed below are the ones I like. I'll be breaking these down into hopefully a top 15 then breaking them down to a 10 then 5 then 3. When I get the 3 I'll post up charts and reasoning on why I picked them. I'll watch these Monday and see what happens.
The tickers with an asterisk next to them caught my attention more than others. I can't say why at the moment but I must of seen something I liked, lol.
Stocks In Play (watching for these to hit my targets, If I see an opportunity to get in I'll take it)
CSUN: Low @ 6.80 High @ 7.07
DRL: Low @ 29 High @ 32.00
ERJ: High @ 44.30
JDSU: Low @ 13.90 High @ 14.20
NVDA: Low @ 34 High @ 35.50
QQQQ: High @ 50.45
TWM: Low @ 63 High @ 65.25
Stocks on the Hot Seat (these have priority over In Play because of better setups and risk/reward if they hit my targets)
LNDC: Low @ 13.85 High @ 14.10
This is has light risk but the potential for profits could go either way. The red line represents huge amounts of resistance. That's going to be a hard level to break, but if it can break it and then turn the resistance and establish those levels as support it could blow to the upside. The 13.80 level is very strong support which looks like a good entry point represented by the green line. The black line would be my stop loss.
LOCM: Low @ 5.72
I like this is a lot because lately it's been riding this strong level of support at 5.70. It has some light resistance ahead represented by the yellow lines but I think the risk/reward makes up for this. Over the last 6 months this 5.70 level has been significant in support, which seems to me to be the time to get in. Target price would be around 6. That would be a potential 5% gain with a risk of 1.2% with our stop loss being at 5.60
RDN Low @ 22 High @ 24
Red line is my exit point, Green line is my entry point, Black line is my stop loss. Roughly 11% gain with a 3% stop loss.
edit: Alright, I drew out support and resistance based on the 6 month action and plotted it on the 5 day chart. Now I'll be plotting out support/resistance on the 5 day action to get some more guides. Then I'll figure the risk/reward ratio based on those setups and at the same time start dwindling them down.
edit2: Support/Resistance are drawn out and I've got them down to the amount shown above.
edit3: Ok, I have my Dream Team of stocks so to speak, haha. These stocks fit my personal criteria and coincide with my trading rules so hopefully one of these will get setup and allow me to get in on Monday.
These stocks did ok for the most part. The were was a little rally for the day so that probably helped. Here's a screen shot recap of yesterday and today's action in the same pic. The days are divided by the Black vertical line.
CHCG:
The yellow lines represent key levels from the day before and some for today. You can see how today's action bounces around these levels. Didn't quite break out like I thought it would but it doesn't make sense that it would now that I look at the results. It did however break yesterdays high but couldn't get any higher. I'd like to have seen it keep making consistent higher highs but it didn't have the strength.
DRYS:
Text book breakout. Tight consolidation the day before and you can see right out the gate it pierced the key high level of the day before it took off. Some small pullbacks along the way but it stayed strong. Volume also represents the action. The day before it was light and weak, then on the breakout, volume increased heavily. By far the best one of the group.
HTV:
Not much action here. It stayed about neutral for most of the day. Volume is still stable from the day before as well as the action being traded in between key levels from the day before. Couldn't quite break yesterdays high but didn't break yesterdays low either. Neutral for the moment. Maybe it'll show a sign on Monday.
NVDA:
This guy didn't do too bad. Broke yesterdays high and sustained a nice peak, came back down to ride yesterdays high as support and fell to about the mid point of the day. Volume picked up a little more to account for the price action which is a good thing to see.
I've gone over about 80-100 charts real quick to setup my high and low alerts. As I was going through them a few charts popped out at me that I really liked. These stocks I'll be keeping a closer eye on throughout tomorrows day.
CHCG: Low @ 4.05, High @ 4.30
-Made a giant swing from the highs of the day out the open rounded out the bottom and ended the day back at the open levels. If it breaks 4.30 and stays there we could see this head up more throughout the day. I'll be watching.
DRYS: Low @ 75.30, High @ 76.50
-Some decent consolidation. While the markets were slowing this one stayed still and traded in a very tight range. Looks to me like a setup for a breakout either way.
HTV: Low @ 25.50, High @ 25.70
-Huge consolidation. Looks like it might be setup to move big either way. This one might be my favorite. Looking forward to see what happens with this.
NVDA: Low @ 33.70, High @ 34.50
More consolidation. I'd like to see a move on one of these but we'll see what happens. Out of all those charts I looked like these stood out like a sore thumb. Maybe something good will happen :-)
If either of theses Lows or Highs are broken tomorrow we could potentially see some nice moves in either direction (long/short). The Q's gapped up post market which isn't a sign I want to see. I think we might see the market open lower out the gate tomorrow, especially since it's a Friday.
* Just because these stocks break these highs or lows I've set, doesn't mean I'll be trading them. It means that they've gotten my attention and I'll be waiting patiently for an entry point, if one isn't present, I won't trade.
I only setup about 10 or so trades with price alerts but only a couple hit but not much action happened after that. The Q's hit my high of 50.25 but quickly fell and now it looks like that'll be the new high of the day (it's 11:30am PST)
I'm organizing together a master trade book of all my trades, wins/losses, good trades bad trades, notes, psychology notes, market analysis stuff like that. This will help me in developing a personal trading history with what works for me and what doesn't, personal patterns, etc. I spent some time last night creating a cover sheet for my book. I'm getting it laminated today to put on my binder/book. I've been keeping a log for some time now, I'm just taking it to the next step.
I'll update this post with a screen cap of the Q's later at the close. It's pretty much the only chart I've been following today since nothing else is going on.
I can easily spend all do doing this to all kinds of charts but it's a little time consuming and I have some notes to consolidate. This is a quick shot of the Q's today. The cut off is at 12:30 PST, so everything after that isn't accounted for. I hope you can see what I tried to outline, I can make it full res but I'm sure it blow out your margins since I'm using a 22in wide screen (the reason why my pics might look so big). In case you do what the full picture it's uploaded here.
Now, on to deciphering this mumbo jumbo. The Green boxes represent consolidation which will either determine a significant price move higher or lower. The Blue circles represent key psychological points where, as you can, they tend to be on the same level across the board. As the top circles started getting lower over time the stock eventually started going lower as people weren't feeling the value of the Q's were worth those previous levels. The Red line represents a key pivot point throughout the day. As you can see, the stock is either above it using it as support or below it using it as resistance, they're key points here. The Purple line at the bottom represents the low of the day and how it bounces up and consolidates then goes back up again to just below the mid day levels. Yellow Arrows represent key points in the stock breaking key psychological levels. Big moves happened when these were broke.
This gives you a good glimpse of what I keep an eye out when I'm watching charts in real time. I'm constantly drawing out new levels and key points and I wait for the stock to either confirm that particular levels strength or to confirm it's weakness.
I only did this because I've always wanted to spend some time visualizing what I was thinking about in the past so I can get a full perspective of my thoughts on the day, and because it was a slow day :-) But since this takes a while, I'll probably only be doing this on trades I actually make.
I have a Roth IRA on the side I make trades in with a longer time frame (about a month). I bought AAPL at 128.45 on 8/28/07 and just sold it about 5 minutes ago at 141.80. In good time too as the stock fell pretty good right after my order went in. Here's a 1 hour intra day chart of AAPL I just took. Orange circle represents when and where I sold. I don't have any plans as far as trades again for my IRA but RIMM, GS, and ZNH come to mind first,
Who know's what will happen. But when you have signs of it, it should be brought to light. Gold has been increasing a lot lately which isn't a good sign. Sure, people are making money but for the overall economy the rise of Gold in my opinion is not a good thing to see rise. It represents Fear and Inflation. Bonds are still increasing along with Gold, a bad combination since Bonds generally represent the opposite of Gold.
When you have Bonds rising along with Gold to me those are signs of a bearish market or signs of one is coming. Even with the fud rate cut both are still rising. CPI index today was lower than normal. Now, it wasn't a whole lot lower, but it was lower. Is this the beginning stages of inflation in the future? I don't know. But I'm keeping a close eye on both Gold and Bonds. Ideally, I want to see Gold start declining over the next couple months while bonds steadily climb.
As you can see from the charts below, Bonds were declining in May and June ahead of the August mortgage crisis while Gold was increasing in June and July ahead of the mortgage crisis. A good sign a bad thing is coming, and it did. Now we have both starting to climb together and Bonds even look like they're declining a slight bit this month, another bad sign. Who knows...
edit: Decided to throw a chart of the S&P 500 in here since it's a good indicator of things to come compared to Bonds. Bonds look to be declining slightly according to the chart above, while the S&P 500 is rising in the same time frame. The fed cut rate skewed the results but if the S&P keeps up this upward climb while Bonds slowly decline and Gold keeps increasing. A perfect setup of a bear market. I'm not predicting anything as I don't know what will happen, but keep your eyes peeled, I know I will.
I started tightening my stop as it was going up and to account for the risk/reward ratio. Once I saw that it was having a hard time breaking 1.81 (target was 1.85) I started to raise my stop loss to account for the lower reward. I got stopped out 1.72 for a -1.71% loss, not bad considering my target was 5.71% gain.
I don't care if the stock hits my price target now. I followed my plan, stuck with it, and executed it based on my goals. I have a small loss compared to my potential profit. I'll start looking for the next opportunity now.
The Blue box represents my entry time and point, Black line represents my entry point in relation to the action, Red line represents my stop loss point and Green line represents my target. Now that I look back at the chart. I can see why it had a hard time breaking 1.81 because it was yesterdays general low of the day (it's not being shown here, I looked at yesterdays intra day).
I bought 300 shares of LUM at 1.75 this morning. It fell to 1.73 and bounced to 1.75 which is a very strong key support level. I wanted to wait for it to test those levels and for the stock to determine the bottom and see how strong those levels really were. Turns out they were very strong and I got in at the strong support level of 1.75 ( blue box represents entry point and purple lines are support/resistance)
It's hitting some resistance right now at around 1.77 which isn't a problem. I think it'll be a good psychological boost if it breaks these levels which could produce nice shot in the air once it peaks these levels.
My exit point is at 1.66. For my system and my plan, this is all I can allow to lose on this trade. I have an alert to go off at 1.70 to let me know the action if I might need to get ready to sell.
My target price is around 1.85 which is a key point for the day. If LUM can get the strength to bust those levels. I think we can see it go higher until around 1.90 which is the next key point of resistence (high of the day).
This is just a note to myself for the record I guess. I have a weird feeling about tomorrow. I'm getting a feeling the Dow will fall a lot,..like, way more than normal. I hope I'm wrong.
Didn't make any trades today. I was watching 6 charts before the Bernanke announced the rate cut and right when it was announced every single stock sky rocketed and i had new high alerts going off like crazy. It was kinda cool to see. I didn't know when he was going to announce but once I saw all the activity, I knew what happened.
I've been focusing a lot on my trading setup and planning out my trades. Something I've been deviating from and I need a couple days off to re focus and get back on track. I've got about 10 stocks I have setup right now. This is what they are.
AIRN- low alert at 2.08
ANO- Low alert at 2.95
AZK- Low alert at 2.45
CHCG- Low alert at 4.72
CNEH- Low alert at 3.25
DIA- Low alert 134.50 (I won't be trading this, just want to know if it gets here. Very bad if it does, lol)
HEPH- Low alert at 2.13 (crucial pivot point) and then a Low alert at 2.05 for a potential buy
LUM- Low alert at 1.75
NABI- Low alert at 4.12
NFLD- Low alert at 1.85
QQQQ- Low alert at 49.00 (again, won't be trading this just want to know if it gets here)
RMDX- Low alert at 2.47
SCON- Low alert at 5.55 and High alert at 5.70
All of these price points came from the analysis of support, resistance and pivot point levels based on intra day charts and 6 month charts. If a stock hits these levels all It'll tell me is that a possible trade could be setup for that given stock. I won't trade it right away when it hits these levels.
My risk is a 1% loss (of my overall portfolio) on any of these stocks and exit point will be known before I enter my trade based on the stocks activity. I'll enter a trade if I think it can make a 5-7% gain over the course of a few days.
Traded LOCM for a significant loss today. I got overly excited this morning as I've been waiting all weekend to trade, now that I do trade, I lost money.
Anyway, got in at LOCM around 16.25 and got out at 16.13 both were market orders (I need to stop using those). LOCM looked good, volume was good, then everything went downhill. Then as I sell, I'm watching another stock that I was going to buy before I saw this one, and that stock went up 4.8% in the time that I lost money. It was INSP.
Anyway, here's the chart of LOCM and the rally it had in the morning and then I bought it at it's peak. September has been really really rough for me :(
Something I need to keep an eye on in the future.
Sina Corp. (SINA) operates China's biggest news portal, making it the go-to site for news from celebrity gossip to takeovers. As of Oct. 1 it could become the most profitable platform for Chinese blogger's.
Sina's move to monetize its massive blog page view inventory (more than 200 million page views a day) puts it on the same playing field as Baidu.com Inc. ( BIDU) , which has been building its "Ad Alliance," sites that run Baidu advertisements.
The case for a rate cut:
-The global credit system still needs help
-Problems in the housing and real-estate industries are spreading into the broader economy
-The broader economy is slowing down
-Lenders need time to understand how bad their problems are
Why the Feds shouldn't cut rates:
-It would bail out the stupid's :)
-It would boost inflation
-The U.S. economy isn't that weak
-Some financial pain is necessary
For an in depth view of each point, check out the MSN money article
Looks like this bank in the U.K. is having a hard time handing out money for loans. They've had to rely on the central bank in England to bail them out.
They keep assuring their customers everything is OK but that didn't stop all these people from rushing to withdrawal as much as they could.
I wonder how this will pan out next week.
Let's see how these stocks are doing. Which ones have hit the mark which ones haven't etc.
ZNH- Bought at 64.42 on Sept 12th close. Currently at 67.04 on the 14th close. A 4.07% gain
If I bought this stock at a lower price like I initially thought, no trade would of happened as it's only gone up from the date I looked at it. Momentum has came to a halt, RSI is still rising and both the 50 and 200 day EMA's are still going strong. Bullish volume has increased for the 14th.
OSTK- Bought at 23.64 on Sept 12th close. Currently at 24.17 on the 14th close. A 2.24% gain
If I bought this stock at a lower price it wouldn't of happened as it's kept heading up like ZNH. OSTK volume have been slightly declining the last couple days.
CPHD- Bought at 20.04 on Sept 12th close. Currently at 20.21 on the 14th close. A 0.85% gain.
This never hit my entry point. This is looking fairly neutral. Big sign is momentum has come to a stop however the EMA's are looking solid. Who knows what will happen.
CNEH- This stock also hasn't hit my entry point but we'll assume that we bought it at the market close on Sept 12 at 3.00. Currently at 2.86 a loss of -4.67%
This stock is so overbought. I'd still look for a pullback on this next week. Volume has declined today on negative volume along with the RSI finally starting to look down now and come back to normal levels. I like this one. I'll be keeping a good eye on it next week.
BARE- Bought at 27.64 on Sept 12th currently at 26.84 a loss of -2.89%
It's looking like it's making it's way back down but still not enough to hit my entry point. RSI is still heading down. MACD look's like momentum might be shifting downward. Both EMA's still look they're on the verge of crossing.
Looks like I need to focus more on the overall market conditions when helping to pick entry points. Overall the market has been pretty good. Dow has seen a solid 2.5% or so gain this week. It makes sense that a lot of the stocks would go with the flow of the market and keep slowly heading up. I need to get out of my tunnel vision when picking low entry points in a stock where the market conditions are looking good.
This is looking a lot more volatile than the others. EMA's are heading in a nice upward trend as well as the overall stock. It's been moving relative to it's volume. The last couple days have been stalling on lower volume. MACD looks like it's running out of steam.
I want to see this pullback lower before I get in. 17.25 area or so or whenever the momentum starts to show positive signs.
Stock looks good to me. I like everything about how this is being setup right now. RSI is on a good upward run. MACD is showing some decent momentum.
The 200 day ema is on an upward trend and the 50 day looks like it's on it's way to starting an upward trend. I would however, like to see it pullback to about 41.60 or so back to it's support levels. Volume has been good all this week along with most of the stocks out there. The Dow has had a great gain this week. I believe it's up at least 2% so far this week.
Made a small quick trade this morning. Saw DESC spike in a huge amount of volume, more than normal. Price started increasing, and all signs pointed to buy. I put in a market order, something I haven't done in a really long time and got in a little late at 0.90 cents. Ended the trade a few seconds later and got out at 0.94 cents for a 4.56% gain.
I'm glad I got out when I did because DESC tanked right after I sold. I saw a huge decline in volume as the stock seemed to stall. I didn't want to take any chances of having it fall so I got out.
It's nice to finish this week with a gain. I wasn't planning on trading but when I see an opportunity I'm going to jump on it.
BIIB was downgraded today by UBS from Neutral to Sell. Might be a good time to get out of this stock or even consider shorting it back down. Volume has been declining this week except for today. Nice bullish spike in volume which is a bummer since the downgrade wasn't announced until after hours. After hours BIIB is now down 1.00 at 64.40. A 1.53% decline.
MACD is also showing the beginning of a downward trend. RSI looks strong but because of the bullish volume today. Tomorrow's close should be completely different. Stock is also coming down from it's resistance level of around 66. There isn't much support until 59 where the stock might catch itself.
Doesn't look like I missed out on anything today. Dow was up but stayed neutral at those levels. Didn't see any big movers pre market that made new highs. None of my watch list stocks hit any of their targets. I'll probably take tomorrow off as well. See what happens over the weekend and maybe pick up on Monday.
On a side note, I got a parking ticket for 38 bucks. Parking in southern Cali is such a pain! :(
MR has been riding it's upper trendline for the last week or so. 50 day EMA has been heading up steadily the last couple months same with the 200 day EMA. RSI looks good along with the MACD indicating some nice momentum.
MR is up 1% at 38.43. If it closes today above the trend line and with some strong volume, to go with it, we might see a nice breakout over the next week leading up to Sept 18th.
I think this could be a solid swing trade. I'll check in on it later.
-Proper money management is essential at all times.
-Remember, tips are for suckers! Never take tips and never give tips.
-Use a system with rules and don’t break the rules.
-Never buy a stock because it looks cheap compared to its recent high.
-“Stocks are never too high to buy and never too low to sell.” – Jesse Livermore
-Don’t take losses personally and never blame the market for your mistakes.
-Never average down. Don’t put good money after bad.
-Sell stocks showing losses and keep stocks showing profits.
-The market has two sides; the right side and the wrong side.
-The right side will always show you a profit.
-Stick to your game and keep emotions at bay by believing in yourself and judgments.
-Cut all losses short and quick, don’t allow losses to grow.
-Check your pride at the door and admit when you are wrong, don’t argue with the market.
-Form a plan for each stock that you plan to purchase.
-Develop an exit strategy for each stock before your purchase.
-Perform post analysis on all of your trades.
-Study, Study, Study. Make a goal to look at a certain number of charts each day.
-It is wise to remember that you are not competing against other traders. You are competing against yourself. If you are not at the top of your game when you play, the probability that you will beat yourself increases.
- In almost any other profession there is a range of performance across all participants. Not everyone in a profession is a top performer, but in most professions you can earn a paycheck without being a top performer.
-The trader who tries to do it all, all the time, is the one who will make a mistake. Don’t be that trader. Know when to take a break.
-We hope for consistent positive results, but until we discover our personal winning trade method, we will have losses.
I won't be trading today or tomorrow. Technically, I don't have it what it takes to be a full fledged day trader and I don't want to be tagged as one. I already have 6 trades in a row and I'm really pushing my luck.
QQQQ's are having a hard time breaking 49.27 if it does that I think it'll have some potential to break out to the upside. Until then, it'll probably stay nuetral today like it's been doing all this week.
On another note, AAPL will be announcing that they'll be carrying the iPhone in Europe. Which I'm sure will make a lot of people happy and boost sales even more now that it's a couple hundred bucks cheaper.
Looks like AAPL is trying to get this thing on it's way to world wide domination.
Spanish telecommunications company Telefonica SA (TEF) acknowledged is in talks with U.S.' Apple Inc. over the right to sell the U.S. company's new phone, iPhone, in Spain, Spanish news agency Efe reported Wednesday.
AAPL is trading up 88 cents at 137.71. A 0.61% gain for the day (8:40am pacific)
Came across an awesome video about what it takes to be successful. Believe it or not but the entire video is summed up in 3 minutes. Check it out.
I can't embed the video so here's the link
Looking pretty good here. It's rounding out the bottom and starting to lift off support from 24.87. There is some resistance ahead but nothing that's really worthy until it gets close to 36 bucks.
MACD is showing nice momentum. It's definitely breaking out from it's downward trend, or trying too anyway. Volume is ok but I'd like to see it pickup as the price increases.
The two EMA's are on the path of crossing, if this keeps up, it might explode to the upside next week.
This stock had a nice run up over the last couple weeks. It spiked on news that this holding had explored unknown areas and came out successful with oil in the area they were exploring. Along with earnings jumping 100's of percentage points.
There are two different points where pullbacks are obvious and it continues to climb. I think there might be a pullback a little bit bigger than those it's already had. Even if it does pullback, I don't know how much steam it'll have in the future to keep going uphill. Next couple days will be good indications of what's going on here. I'll check back in on this on Monday and see how it does.
Retail Report is set to be released on September 14th at 8:30am eastern time. This is going to be a big deal. I think it'll have the same impact as the jobs report came out a few days ago. Good or bad I think this will either make or break that day.
The prior report came in at a 0.3% gain. Estimates are at around 0.6% by briefing.com and the market consensus is 0.5%
The retail sales report is a measure of the total receipts of retail stores. The changes in retail sales are widely followed as the most timely indicator of broad consumer spending patterns. Retail sales are often viewed ex-autos, as auto sales can move sharply from month-to-month. It is also important to keep an eye on the gas and food components, where changes in sales are often a result of price changes rather than shifting consumer demand.
Retail sales can be quite volatile and the advance reports are subject to rather large revisions. Retail sales do not include spending on services, which makes up over half of total consumption. Total personal consumption is not available until the personal income and consumption reports are released, typically two weeks after retail sales. briefing.com
This looks good but not as good as the other two posted earlier. It has a nice steady upward trend going on. Some solid support at 18.75 or so. Which would be the ideal point to get in. There is some resistance at 12.35 and 19.80 but it's fairly weak and I don't think it would have too hard of a problem breaking through.
The chart looks like it handled the month of August fairly well. Which is a good sign that it can handle bad economic situations and has strength. In fact, there looks like it had an abnormal amount of shares being bought in early August.
I'd say a more of a mid-long range pick. I'll keep this one on the back burner and see how it works out.
